Oak Valley Bancorp's (NASDAQ:OVLY) Upcoming Dividend Will Be Larger Than Last Year's
Oak Valley Bancorp's (NASDAQ:OVLY) dividend will be increasing from last year's payment of the same period to $0.16 on 11th of August. Although the dividend is now higher, the yield is only 1.1%, which is below the industry average.
Check out our latest analysis for Oak Valley Bancorp
Oak Valley Bancorp's Dividend Forecasted To Be Well Covered By Earnings
Even a low dividend yield can be attractive if it is sustained for years on end.
Oak Valley Bancorp has a good history of paying out dividends, with its current track record at 9 years. While past records don't necessarily translate into future results, the company's payout ratio of 7.7% also shows that Oak Valley Bancorp is able to comfortably pay dividends.
Looking forward, earnings per share could rise by 28.7% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the future payout ratio could be 6.4% by next year, which is in a pretty sustainable range.
Oak Valley Bancorp Is Still Building Its Track Record
The dividend's track record has been pretty solid, but with only 9 years of history we want to see a few more years of history before making any solid conclusions. The dividend has gone from an annual total of $0.10 in 2014 to the most recent total annual payment of $0.32. This works out to be a compound annual growth rate (CAGR) of approximately 14% a year over that time. Oak Valley Bancorp has been growing its dividend quite rapidly, which is exciting. However, the short payment history makes us question whether this performance will persist across a full market cycle.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. Oak Valley Bancorp has seen EPS rising for the last five years, at 29% per annum. A low payout ratio gives the company a lot of flexibility, and growing earnings also make it very easy for it to grow the dividend.
We Really Like Oak Valley Bancorp's Dividend
Overall, a dividend increase is always good, and we think that Oak Valley Bancorp is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Now, if you want to look closer, it would be worth checking out our free research on Oak Valley Bancorp management tenure, salary, and performance. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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